Lithocholic acid, a bile salt derived from the action of colonic bacteria on chenodeoxycholic acid (a primary bile acid), is known to cross the placenta and to cause lesions of the biliary ducts in monkeys which resemble congenital malformations in human newborns. A bile salt specific sulfotransferase has been identified which may provide partial protection from the hepatotoxic effects of lithocholic acid by forming non-toxic, polar lithocholate sulfates. Our studies have shown that bile acid sulfotransferase is inducible in fetal liver by exposure to maternal lithocholate in utero. However, when the capacity of the fetal hepatic sulfation system for bile acids is overwhelmed by large dietary intakes of lithocholate by pregnant rats, a permanent lesion of the intrahepatic bile ducts is produced in newborns, associated with chronic cholestasis. This injury resembles intrahepatic biliary atresia in human newborns. Work in progress is aimed at evaluating the effects of inhibitors and activators of bile acid sulfotransferase on the production of these biliary malformations.